Posts Tagged ‘LGBT’

Members of the LGBT community tend to save more money for retirement than the population as a whole. But LGBT seniors planning for retirement also face unique concerns.

According to experts, people in the LGBT community tend to be higher earners, and have smaller families, some with no children. While lower family expenses may make it easier to plan for retirement, LGBT couples without children may also have to plan for additional caregiver costs as they approach retirement age.

Although same-sex couples may now marry in New York, the federal government does not yet recognize those marriages, and this creates complications for LGBT couples in terms of tax and estate planning.

As one example, estate taxes in 2013 will revert to a $1 million exclusion. When a heterosexual spouse passes away, his or her assets over $1 million can usually pass to the surviving spouse without being subject to the tax, but this federal right does not apply to LGBT couples, married or not.

Social Security is another concern for LGBT couples, as spousal benefits are not provided to same-sex partners. In addition, federal pension plans do not provide for spousal benefits. LGBT couples must also be careful when moving property into joint ownership, as this can result in a large gift tax.

With careful estate planning, there are solutions to many of these issues. LGBT couples planning for retirement would be advised to seek the counsel of a qualified estate planning attorney familiar with the unique needs of the LGBT community.

Every couple planning a life together should make sure their financial and legal house is in order, but same-sex couples have additional concerns. Even in New York, and other states where same-sex marriage is legal, there are issues that LGBT couples should be aware of.

One concern is paying taxes. Previously, the state of New York recognized gay marriages performed in other states, but that recognition did not extend to tax matters. Now, with gay marriage legal in New York, taxes are a bit more complicated. Same-sex married couples in New York must now maintain two separate tax identities.

When it comes to state income taxes, same-sex married couples in the state of New York must now file their state taxes using a married filing status, and file their federal income taxes on an individual basis. Unfortunately, this will result in an additional burden of time, as two separate tax returns will now be necessary. Married LGBT New Yorkers will have to file their federal tax return as if they were not married, but will still have to complete a return using married status in order to calculate their state income tax. If the couple is using an accountant, the additional time unfortunately results in additional costs as well.

LGBT couples who wed at any time in 2011 will be considered to have been married for the whole year, for tax purposes, so 2011 state returns will need to be filed as married.

LGBT couples need to be aware of the legal documents that can protect them in the event of a medical emergency. Unlike heterosexual married couples, whose rights to visitation and to make medical decisions are unquestioned, LGBT couples – and unmarried heterosexual couples – are not afforded the same rights. This is why it is essential for couples to understand the importance of power of attorney and living wills.

Many LGBT couples want the right to visit their loved one in the hospital, and want their loved one to have the right to make critical healthcare decisions. The solution is a living will with healthcare power of attorney.

A living will is a document stating an individual’s wishes in the event of a medical emergency resulting in incapacitation. A living will explains what procedures one does and does not want in an end-of-life medical situation. It can contain directions concerning artificial resuscitation, pain medicine and life support procedures.

A healthcare power of attorney document is a way for an individual to appoint another to make those medical decisions. It has the effect of giving LGBT couples the decision-making rights that are already afforded to heterosexual married couples.

Even gay and lesbian couples who are married in their state need to consider a living will with healthcare power of attorney. Though a couple may live in a state that recognizes gay marriage, these documents may be of crucial importance when traveling out of state.

What documents are important for LGBT couples:

A living will states a person’s wishes in the event of a life-threatening medical emergency

A healthcare power of attorney assigns healthcare decision-making power to a particular person